Indictments have policymakers' attention

JOSH SHEPHERD and RENI WINTER

KNIGHT RIDDER NEWSPAPERS

WASHINGTON - The recent breakup of a suspected kickback operation at Stennis Space Center in South Mississippi is causing Washington policy-makers to take a second look at the space agency's management contracts with outside groups.

''It's unavoidably the case that when you see a pattern of criminal activities that you need to review existing management procedures,'' said John Pike, a policy analyst for the Federation of American Scientists. That federation is a nonprofit organization that conducts analyses on science, technology and public policy.

Pike was referring to allegations by a federal grand jury of a series of kickbacks and payments by former employees of Johnson Controls World Services. Johnson Controls was privately contracted to run most of the daily operations for Stennis Space Center. All but 200 of the nearly 4,000 employees at Stennis work for private contractors. The remaining 200 work directly for NASA.

Bill Mizell, owner of MCS Co. and Magnolia Industrial Supply Co. and a sales representative for Universal of St. Louis, faces 12 charges involving conspiracy to solicit kickbacks, obstruction of justice and making a false statement in connection with the NASA operation. He has been released from jail on $100,000 bond.

The government alleges that six employees at Johnson Controls bought more than $2 million in supplies from Mizell in return for kickbacks, from 1994 until early this month.

The seven men are scheduled for arraignment Tuesday at federal court in Biloxi and face charges that include giving and receiving kickbacks and theft of government property.

Stealing may happen again

A spokesman for U.S. Rep. Gene Taylor, a Democrat from Bay St. Louis, said these allegations do not reflect on the space center as a whole.

''The congressman feels that if these men have done something wrong, then they should be prosecuted to the fullest,'' said Beau Gex, a spokesman for Taylor.

There is some concern, however, that if private employees could steal from public funds once, then the existing management structure leaves room for it to happen again.

''With NASA's trend toward privatization, the concern is that government is losing sight of what the contractors are doing,'' said Pike, with the Federation of American Scientists.

Not so, says Lance Carrington, the NASA special agent in charge of the Stennis investigation.

''There is a lot of policy, regulation and laws in place (to curb this activity). These people just decided not to adhere with them,'' he said.

''If somebody wants to violate the law, and do it secretly, there is nothing (to stop them),'' Carrington said.

Pike agreed, saying, ''This isn't the first time crooks have stolen from NASA, and I guarantee you it won't be the last.''

Carrington added that Mississippi Space Services, the contractor that now operates at Stennis, is instituting stricter policies to curb the activities that officials suspect occurred at Stennis.

''There have been a lot of briefings and directives on integrity and ethics,'' Carrington said.

Johnson Controls cooperates

NASA became aware of the alleged activities after receiving an anonymous phone call, Carrington said.

That phone call came from an unnamed Johnson Controls employee, said Mark Filteau, vice president and general manager of Johnson Controls World Services.

"In February 1999, Johnson Controls informed local NASA officials of the suspected theft and has fully cooperated with NASA and the investigator general's office continuously since that time," Filteau said. "Neither Johnson Controls nor any of its managers have been accused of any wrongdoing."

When NASA informed Johnson Controls last summer that its contract would not be renewed at Stennis, company officials were told that the investigation of certain employees had no bearing on the decision to replace Johnson Controls, Filteau said.

Funding unlikely to be affected

''Cases like this raise the question of where you draw the line,'' said Ralph DeGennaro, president of Taxpayers for Common Sense, an independent watchdog group that monitors government spending. ''Contracting out work is good; contracting oversight of the taxpayer dollar is bad.''

''It's certainly cause for concern,'' agreed Lee Youngblood, a spokesman for Senate Majority Leader Trent Lott, R-Miss. Lott was unavailable for comment on any possible legislative action that may arise. ''We don't see any reason that it would affect legislation for appropriation of funds,'' Youngblood said.

Gex, the spokesman for Rep. Taylor, agreed. ''It should have no effect on the continued funding of the space center.''

Sen. Thad Cochran, R-Miss., said that "since these charges relate only to facility maintenance and supply contracts, I doubt they will put the center in jeopardy."